PUBLIC NOTICE

 Collection of land rates by KRA

Kenya Revenue Authority (KRA) wishes to draw the attention of all rate payers and the public to an article that appeared in the “People Daily” dated 21-12-2005 entitled “KRA-NCC rates pact in peril” and wishes to state that:

• KRA entered into a mutual agreement with the City Council of Nairobi (NCC) in February 2005 after signing a Memorandum of Understanding (MOU) that gave KRA the full mandate to collect all land rates revenue and account for the same at a commission of 1.5% of the collected amount.

• Being a reputable revenue collection body, KRA put in place the necessary machinery to perform the task professionally. However, KRA could not perform as expected due to the continued maintenance of a parallel collection point by NCC that contravened clause 3(a) of the MOU which explicitly stated that “it shall be the sole responsibility of KRA to collect such sums of monies that is payable by any rateable owners as land rates”. This made it difficult for KRA to execute a strategy to enforce payment of land rates as had earlier been envisioned.

• In addition, KRA did not receive the necessary cooperation from NCC to execute its mandate as stipulated in the MOU.

• As a consequence, KRA gave NCC a one month notice of termination of the MOU (as per the provisions of clause 10) in a letter dated 19 th August 2005 .

• The MOU did not limit KRA to collecting old debts only but was required to collect all current land rates as well as arrears.

• KRA did not receive any commission in advance as insinuated by the City Treasurer but received 1.5% commission on the actual amount collected as stipulated in clause 7 of the MOU.

• KRA also wishes to advise rate payers and the public that it has issued a notice of termination of the MOU entered into between the Authority and the Municipal Council of Mombasa (MCM) on collection of land rates. This decision is in line with the termination clause as stipulated in the MOU.

Commissioner of Domestic Taxes